Little Bird Electronics posted an article about using an analog voltage reference with Arduino. This is a tool available when using an analog-to-digital converter. By setting up either an internal or external AREF, you can better use the ADC considering its resolution limitations. For instance, if you are measuring a signal that you know will always be below 2V, an external circuit, such as a voltage divider or an adjustable regulator, can give you a reference voltage just above that upper limit; say 2.5V. This way the 1024 divisions of resolution will be spread across your signal’s range, rather than just the lower half of the ADC readings.

Analog references are common to microcontrollers that have ADCs. Even if you’re not working with an Arduino, read through the article and use what you learn with your uC of choice.